Pyxus Options Hot After Earnings, Korent Update

Options volume is running hot on Pyxus International Inc (NYSE:PYX) this afternoon, as the stock heads toward its best day since Oct. 8. At last check, around 18,000 options have been exchanged -- five times the average daily volume -- with PYX shares trading up 28.1% at $21.58.

Today's upside comes in reaction to the leaf tobacco manufacturer's fiscal third-quarter results, which showed revenue surged 10% to $524 million. The company also gave an update on its cannabis operations, noting headway was made toward the launch of its cannabidiol e-liquid line, Korent.

Options traders are targeting even more upside for the shares. The February and March 20 calls are most active, and it looks like new positions are being purchased. If this is the case, call buyers' profit will accumulate the further north of $20 PYX stock climbs. Traders also appear to be buying to open the February and March 22.50 and 25 calls.

Today's call-skewed session just echoes the recent trend seen in Pyxus' options pits. At the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), speculative players have bought to open 5.48 calls for each put in the last two weeks.

With earnings in the rear-view mirror, short-term volatility expectations have plummeted -- pointing to relatively cheap options premiums at the moment, relatively speaking. Most recently, PYX's 30-day at-the-money implied volatility was docked at 110.7%, in the 16th percentile of its annual range.

Looking at the charts, Pyxus stock has kicked off 2019 with a bang, up 80% so far. However, the shares remain well off of their Oct. 9 eight-year high of $52.43, and are struggling to close a Nov. 8 earnings-induced bear gap.